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President Signs Bill to Expand SCHIP Funding

Andrew Nagy
Posted: February 5, 2009

President Obama seemingly ended two years of controversy on Wednesday, signing a measure that raises the federal excise tax on tobacco while expanding the State Children's Health Insurance Program (SCHIP).

The bill, which was ratified by the House earlier in the day by a vote of 290-135, calls for the tax on large cigars to be capped at 40.26 cents per cigar. The legislation will take effect on April 1, the day after funding for SCHIP was originally scheduled to end. The current tax has a five-cent cap.

In addition to raising the price of cigars, the new law calls for an increase on the price of a pack of cigarettes as well as "roll your own" tobacco.

The measure authorizes $32.8 billion, funded by the new tobacco taxes, for SCHIP, a 12-year-old program that provides health insurance coverage to families who can't afford it, but don't qualify for Medicaid.

Since 2007, the expansion of SCHIP has had Democrats and Republicans at odds. Twice the Democrat-controlled Congress passed bills to expand the program, and twice former president George W. Bush vetoed them.

For more on this story, check out Tuesday's Cigar Insider.

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